|
|
|
Economics 101
If
you are planning for today, it's too late. The day is already
here. What you will be left with is a series of reactions that
are not under your control, but instead are dictated by the forces
around you. Planning should be about tomorrow and the years to
come.
For some time we have been discussing our economic
point of view, bringing attention to the difficulties that we face in
our economy and in economies around the world. The list is long,
including too much debt, cities and states in trouble, rising taxes,
and fewer opportunities for growth. The trends are evident for
all to see and are unfolding as if almost on queue.
We
are now halfway through 2010, the relief rally in the equity markets is
behind us, the grim reality of the true nature of our situation is
sinking in as people realize that unemployment will remain stubbornly
high and stimulus spending is not a magic bullet. Things are
different. The bad news is easy to find. The good news
takes a little effort.
On the national stage, there are
conversations that were unthinkable just a few short years ago.
Lower benefits, higher taxes - all in an effort to attack the federal
deficit. While the conversation is but a whisper in the US
Capitol, it is a virtual shouting match in cities and states around the
country. Faced with the possibility of closing down all public
offices like Maywood, CA, many cities are finally confronting their
budget woes. States are beginning to say "No" to special interest
groups. A sober, clear-eyed accounting of where we are is being
tallied. This sets the stage for how we emerge from this Great
Recession.
Which brings us back to planning for the
future, not reacting to today. The next several years could be
marked by less growth opportunities, so conservation and streams of
income are important. Taxes will be marching higher, so charting
a course of tax minimization today can pay handsomely tomorrow.
The best time to buy an asset such as a house, boat, or even car,
should come as the economy slows again, yielding great deals. And
there is the possibility of higher interest rates in the months ahead
on corporate debt and municipal bonds as investors think twice about
the credit quality of these borrowers.
All of this
could occur in the course of our economy resetting itself to a position
of less debt and less reliance on consumption, as well as bringing our
social programs back into line with our ability to pay at all
levels. This can't help but create a better environment for the
next generation, which has always been our first
responsibility. |
Steps to Retirement Planning
Things to Love (or Not) About Finances
What
else do you need to know about finances? It's all overwhelming. This
month, we'll cover a few more tips that are easy to accomplish - and
maybe not even all that distasteful.
1. Taxes. Okay,
so they're distasteful, but if you do not pay attention and manage your
finances to avoid needless taxes, who will? Just when you think you
begin to understand your options, the IRS changes all the rules. It can
be tempting to take the 1040EZ shortcut, but don't do it blindly. The
average taxpayer leaves more than $400 on the table by overlooking
deductions and other opportunities to cut the tab.
Key-
Create an old-fashioned accordion style folder to organize your
receipts and paperwork. When you go to do your taxes, spotting
deductions will be a breeze.
2. Hidden Fees. You
may be able to turn a blind eye to the soap scum buildup in the shower,
but avoiding the cursory review of your monthly bills can add up to
thousands of dollars literally flushed down the toilet.
Key-
The first place to start is with utility bills, such as cable,
internet, cell phones, and gym bills. A 20-minute review every other
month of these basics, can catch the occasional tax or added fees on
these bills.
|
Who was the only U.S. President to be a school teacher? (Hint: children 18 and under - no professors).
For fastest reply, respond to the email at the end of this newsletter. |
Baseball was the theme of last month's quiz. Who were the
first father/son team to not only play together, but hit
back-to-back home runs?
The correct answer is Ken Griffey, Sr.
and Ken Griffey, Jr. Congratulations to Lydia Wynes , VA Central
Iowa, for being the first to respond with the correct answer!
Thanks to all who responded!! |
|
Contact Us
202 West 7th Street
Carroll, IA 51401
Email: federal.info@sklenar.com
phone:
866-792-6668 (toll free)
712-792-6400 (local)
fax: 712-792-6670 |
|
|
Alphabet Soup
Lifecycle Funds Celebrate 5th Anniversary
The five Lifecycle funds were rolled out in August of
2005 and just celebrated their fifth anniversary. So what do we
know about these funds and their performance five years later?
In
July 2010, the Lifecycle funds hit their highest level of participation
ever with just over 700,000 of TSP's 4.1 million participants using the
Lifecycle funds. Of those 700,000 Lifecycle participants, only
138,000 were using one Lifecycle fund exclusively.
This often
comes up in the programs we do on TSP, when participants share that
they're using several Lifecycle funds. The challenge to this
allocation strategy is that with the combination of allocations within
the Lifecycle funds, you really have no idea what your allocation is when you combine more than one Lifecycle fund.
Because
the Lifecycle Funds were designed to make your life less complicated,
not more..., if you choose to use the Lifecycle Funds for your TSP
allocation, select the one closest to the date you anticipate using the
funds (not necessarily your retirement date). If you're right in
the middle of two of the model years - e.g., you plan to retire and
start taking income from your TSP in 2025 - look at your own level of
risk tolerance and if you tend to be more conservative, use the L2020
and if you tend to be more aggressive, use the L2030.
For more information on allocating your TSP in volatile times, contact my office.
Phone:866-792-6668 or email federal.info@sklenar.com |
|
Just 7 Years
Even though many home buyers take out a 30-year
fixed rate mortgage when buying a home, few people keep the mortgage
for the entire 30 years. The average life span of a 30-year fixed rate
mortgage is only 7 years
(Source: Financial Times). |
|
TSP Returns
August 2010
G Fund
August: .22%
YTD: 2.06%
F Fund
August: 1.28%
YTD: 7.89%
C Fund
August: (4.51%)
YTD: (4.62%)
S Fund
August: (5.59%) YTD: .21%
I Fund August: (3.14%)
YTD: (7.80%)
LIFECYCLE FUND RETURNS
L Income August: (.63%)
YTD: 1.26%
L 2010
August: (.62%)
YTD: 1.18%
L 2020
August: (1.29%)
YTD: (1.10%)
L 2030
August: (2.88%)
YTD: (1.80%)
L 2040
August: (3.33%)
YTD: (2.43%)
Returns courtesy of : |
|
New Health Care Law
The provision in the health care reform (signed by
President Obama on 3/23/10) that allows a young adult to stay on
his/her parents' plan until age 26 becomes effective on 9/01/10. For
plans that operate on a calendar year basis (like your FEHB), this new
law becomes effective on 1/01/11.
(Source: White House)
|
|
